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Title: An Analysis of the Interaction between Health Expenditure and its Determinants in the U.S.

Citation Type: Miscellaneous

Publication Year: 2015

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Abstract: This paper investigates the dynamic economic relationship between healthcare expenditure, macroeconomic determinants, the age structure of the population, and the elderly's self-assessed health status. We investigate the dynamic relationship between health expenditure and its determinants after transformations to stationarity. We find that an improvement in the elderly's health status slows down the rising healthcare cost. The increase of the proportion of the elderly people in the population has a positive effect on the rising healthcare cost. Healthcare is found to be a necessity good after controlling for the other determinants. Moreover, relative healthcare price and public financing are significant factors affecting the increase of the healthcare cost. An out-of-sample prediction analysis shows that accounting for the elderly's health status helps to improve the accuracy of the health expenditure forecasts, compared to ignoring the relationship and to official (CMS) forecasts.

Url: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2662981

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Authors: Yang, Ying; Melenberg, Bertrand

Publisher: Tilburg University - Center for Economic Research (CentER)

Data Collections: IPUMS Health Surveys - NHIS

Topics: Health, Population Health and Health Systems

Countries: United States